Interest Rates

[Davo36]

Now that you've highlighted the reason I understand the intent of what they're trying to do but my example highlights the enormous holes in that policy - i can get access to as much cash for dodgy or illegal actions as long as i sell something vs. borrowing someone else's cash to do it. Which is why i don't agree with it.

If they were to close the holes in the program so it was water tight, i'd be less resistant to complying to their futile attempts.

It's similar to putting locks on your windows but leaving the front door ajar.

I think the idea is that if you own a house, you've paid for it with legitimate funds - because those funds were checked when you brought them into the country, or when you borrowed the mortgage and paid it off slowly etc.

So they are choosing one end to focus on - when when the money is borrowed I guess. And so then they assume that assets bought with this money (which has presumably been checked and given the tick) are OK.

[Wellington Broker]

So if i have a house worth $1M, with a loan of $100k against it and i need $50k... i have 2 options:

1- Sell my house for $1M pay back what i owe and get proceeds - on settlement i get $900k less costs and no one asks what i am going to do with the funds.
2 - Decide to borrow against the house - i go to the bank and look to borrow $50k, now i have to disclose what i'm planning to do with the $50K

seems a very drastic measure to not disclose what i'm spending the $50k on but it doesn't seem that the requirement by the bank for disclosure is driven by legislation unless you have to disclose what you are planning to do with the proceeds of sale - which i've never been asked.

You're not borrowing more money if you sell though. I spoke with someone today who wanted to borrow 100k to quit his job and start a new business - guess what the affordability calculation for the new loan is based on?

[jc_sbc_12]

Hi guys,

Renewal of Interest Only Loan in coming September 2017.
Have phoned BNZ to ask if they have any special offer since TSB advertising 4.49 for 2 yrs fixed.

They come back to me saying that their advertised rate is 4.79% fixed for 2 years.
The best offer that they can give me as premium customer is 4.59 Classic Fixed for 2 years.

Do I lock it now or wait until September as rates may go down.
We have until Monday 10/7/17 to decide whether to take lock 4.59% fixed for 2 years.

We are keeping the rental property.

Appreciate your opinions.

Thank you.

[Perry]

Do I lock it now or wait until September as rates may go down.

Whomsoever could answer that call with accuracy would likely make a fortune.

Especially given the roller coaster ride that's been interest rates over the last decade or so.

All you can do is make an educated guess.

And cross your fingers.

[Anthonyacat]

I'm personally not even of the opinion of making educated guesses and crossing fingers.

My strategy is to choose a rate that I'm happy with, and then ignore it for the rest of the fixed period. We've got no idea what'll happen to interest rates, and we've got no control in the matter, so it's not something to expend precious mental energy on. Look at the rates you're provided, do your best to negotiate them as low as possible, choose the one(s) you're willing to pay for the rest of the fixed period, and sign the document!

[Minz]

I received the same rates from BNZ, as the particular mortgage due to be refixed is very small and I can't see what is going to happen, I am going for the cheapest rate possible....fixing for 1 year. I merely go for the lowest option possible at this point.

[newbyvest85]

Hi all, my rates from BNZ in late June were:

4.30% for 1 year
4.50% for 2 year
4.80% for 3 year.

Managed to negotiate down to 4.25% 1 year.

[BigDreamer]

Hi all, my rates from BNZ in late June were:

4.30% for 1 year
4.50% for 2 year
4.80% for 3 year.

Managed to negotiate down to 4.25% 1 year.

This is for a new loan with BNZ or refixing existing loans? If refixing, what was your LVR with BNZ?

[JBM]

Hi all, my rates from BNZ in late June were:

4.30% for 1 year
4.50% for 2 year
4.80% for 3 year.

Managed to negotiate down to 4.25% 1 year.

thats some great rates ...best 1yr I could get with WP was .24% higher than your neg rate and I only have a LVR of 28%

[propertynewb]

My offer from BNZ today.

Loan Type	Fixed Rate Period or Variable	Indicative Rate (% per annum)
Standard or Fly Buys Fixed Rate	6 months	4.39%
Classic Fixed Rate (owner occupied & mixed only)	1 year	4.25%
Standard or Fly Buys Fixed Rate	1 year	4.35%
Standard or Fly Buys Fixed Rate	18 months	4.39%
Classic Fixed Rate (owner occupied & mixed only)	2 years	4.39%
Standard or Fly Buys Fixed Rate	2 years	4.49%
Classic Fixed Rate (owner occupied & mixed only)	3 years	4.75%
Standard or Fly Buys Fixed Rate	3 years	4.85%
Standard or Fly Buys Fixed Rate	4 years	4.99%
Standard or Fly Buys Fixed Rate	5 years	5.25%
TotalMoney Variable/Std or Flybuys	Variable	5.20%
Rapid Repay Variable	Variable	5.25%

[Nick G]

That's pretty sharp

[Rosco]

My offer from BNZ today.

Loan Type	Fixed Rate Period or Variable	Indicative Rate (% per annum)
Standard or Fly Buys Fixed Rate	6 months	4.39%
Classic Fixed Rate (owner occupied & mixed only)	1 year	4.25%
Standard or Fly Buys Fixed Rate	1 year	4.35%
Standard or Fly Buys Fixed Rate	18 months	4.39%
Classic Fixed Rate (owner occupied & mixed only)	2 years	4.39%
Standard or Fly Buys Fixed Rate	2 years	4.49%
Classic Fixed Rate (owner occupied & mixed only)	3 years	4.75%
Standard or Fly Buys Fixed Rate	3 years	4.85%
Standard or Fly Buys Fixed Rate	4 years	4.99%
Standard or Fly Buys Fixed Rate	5 years	5.25%
TotalMoney Variable/Std or Flybuys	Variable	5.20%
Rapid Repay Variable	Variable	5.25%

At these levels, why wouldn't you be looking at some long term rates?

I like the old saying, "don't put all your eggs in one basket".

It depends a lot on other lending, but if for example you only had one loan of $530k, I would look to split something like
30k floating, with aim to pay off over next year
$250k 1 year at best rate, 4.25%
$250k at 4 or 5 years to give some long term protection

Using this example,
- if interest rates go up, at least you have around half fixed long term
- If interest rates go down, at least you have around half fixed for only 1 year

I personally think floating large amounts is pointless. If you really wanted to keep it short, you could fix for 6 months and save almost 1%.

Ross

[BigDreamer]

My offer from BNZ today.

Loan Type	Fixed Rate Period or Variable	Indicative Rate (% per annum)
Standard or Fly Buys Fixed Rate	6 months	4.39%
Classic Fixed Rate (owner occupied & mixed only)	1 year	4.25%
Standard or Fly Buys Fixed Rate	1 year	4.35%
Standard or Fly Buys Fixed Rate	18 months	4.39%
Classic Fixed Rate (owner occupied & mixed only)	2 years	4.39%
Standard or Fly Buys Fixed Rate	2 years	4.49%
Classic Fixed Rate (owner occupied & mixed only)	3 years	4.75%
Standard or Fly Buys Fixed Rate	3 years	4.85%
Standard or Fly Buys Fixed Rate	4 years	4.99%
Standard or Fly Buys Fixed Rate	5 years	5.25%
TotalMoney Variable/Std or Flybuys	Variable	5.20%
Rapid Repay Variable	Variable	5.25%

New loan or refixing an existing loan?

If refixing, what is your current LVR?

[propertynewb]

At these levels, why wouldn't you be looking at some long term rates?

I like the old saying, "don't put all your eggs in one basket".

It depends a lot on other lending, but if for example you only had one loan of $530k, I would look to split something like
30k floating, with aim to pay off over next year
$250k 1 year at best rate, 4.25%
$250k at 4 or 5 years to give some long term protection

Using this example,
- if interest rates go up, at least you have around half fixed long term
- If interest rates go down, at least you have around half fixed for only 1 year

I personally think floating large amounts is pointless. If you really wanted to keep it short, you could fix for 6 months and save almost 1%.

Ross

Agreed. I am about to have $50k floating with the aim of paying it off by end of 2018 - the rest is still fixed at 4.94 for three years.

[propertynewb]

New loan or refixing an existing loan?

If refixing, what is your current LVR?

Refix @ 63% LVR